?? ?????????????????? ???????????????????? ??

Heading out of the great webinar by Dr. Tal Mofkadi on investing psychology, he presented some interesting and weird ways of how our brain works and how sometimes it can trick us by only changing the perspective of how we see and evaluate things. The most important takeaway from the webinar is how emotions play with us in our investment decisions.

When investing, investors sometimes either regret or overreact during times of stress, euphoria or panic. Especially retail investors typically ???????????? ?????????? ????????-???????????? ???????? expecting a return just like every single investor in the planet. Although, their investments lose value in correction or bear markets and those losses can cause stress and panic. The key is to take a rational approach to investing.

As you can see below in the “???????????? ?????????????? ???? ??????????????” image, there is a common cyclical investment process within new or less experienced investors. Emotions are a great asset in our lives, but they can be the biggest threat to our investing process. There’s the feeling of excitement whenever the market goes up, but also the fear when the market goes down.

This roller coaster of emotions and feelings can lead investors into costly mistakes, for example buying at the market’s peak or selling just before the market rebounds. Before making a decision, leave your emotions on the side, take a step back and think why you have invested in the first place. This will ensure that you don’t let your emotions affect your investment decisions and help you stick to your strategy & plan.

Human psychology is a dangerous thing when investing, but it’s critical to not make the same mistake again and again. Investing is a learning process, no matter how many years of experience you have, there will be always something new to learn.

?? ???????? ???? ?????????? ?????????????? ???????? ??????????????????

? ?????????? ???? ?????? ????????????????: When you start investing, it’s important to set an investment plan followed by a time-horizon goal. Then you really have to stick with it so you don’t get trapped in short-term traps.

? ??????’?? ???????????? ???? ??????????: Stop watching what the media is saying, they tend to over-exaggerating especially when the market is correcting or going down. Instead, look for other experienced investors' opinions and always look for a bullish and bearish view on the situation.

? ?????????????????????????????? ???? ??????????????????: Diversification will help you to go through volatile times. Of course, there will be times that the market is going down almost as a whole but also there will be even more times where some sectors will be down and others don’t, offsetting the losses for the losers.

? ????????????-???????? ??????????????????: The underrated strategy that can work whatever is the market condition. Specifically in a downward trending market, using DCA (dollar-cost averaging) will enable you to buy shares at lower prices and therefore as the name says, you will be averaging your buying price. This means that once the market recovers, you will recover at a faster pace.

? ???????? ???? ??????????????: You already know the quote “Investing is a marathon, not a sprint”, but really, this is true. The faster you try to get-rich-quick, the higher the chance there is to lose your money. Usually, the sprinter is emotional, so being consistent over time is extremely difficult. Being an emotionally controlled marathoner will lead you into consistent and long returns over your investing horizon.

?????? ??????? ???????? ???? ?????? ?????????? ????’?? ???????? ???? ???????? ?????? ???????????????? ???????

Share it in the comments ??

Would you like to invest with no effort? Find my profile on eToro:

?? https://www.etoro.com/people/paulogabrielsa

Thanks for reading.

Let me know what's your opinion in the comments down below.

Send me PM if you want to connect and discuss furthermore.


All the best,

Paulo Sá